Isaac’s advance roils oil, gasoline markets

Prices for crude oil and gasoline rose today as the advance of Tropical Storm Isaac caused companies to shutter offshore production in the Gulf of Mexico and threatened Gulf Coast refineries.

Crude futures for October delivery on the New York Mercantile Exchange rose $1.03 a barrel to $97.18, the biggest increase in a week. Forecasters are predicting Isaac will pick up strength, becoming a hurricane and making landfall early Wednesday between New Orleans and the Florida Panhandle.

About 24 percent of U.S. oil production and more than 8 percent of natural gas production has been affected by the storm, as oil companies pulled crews from 39 rigs, according to the Bureau of Safety and Environmental Enforcement. The affected facilities account for about 6.5 percent of the 596 manned platforms operating in the Gulf, BSSE said.

Transocean, BHP Biliton, Anadarko and Apache have all pulled personnel from rigs in the eastern Gulf. BHP said none of its production has been shut in, but Apache said it has cut production by 24,000 barrels and 91 million cubic feet of a gas a day until the storm passes. Anadarko is moving two rigs to a safer location.

Meanwhile, Issac’s advance raised fears that the storm could affect pipelines, refineries and tanker deliveries. Gasoline futures climbed to their highest in four months, driven by storm concerns and a refinery explosion in Venezuela that killed 41 people. Fires continued to burn into the third day at the 645,000-barrel-a-day refinery, the world’s second biggest, after a gas leak sparked an explosion early Saturday morning.

Phillips 66 said its temporarily shutting down its 247,000-barrel-a-day Alliance Refinery in Belle Chasse, La. The Louisiana Offshore Oil Port said yesterday it plans to suspend tanker deliveries by Monday afternoon. The LOOP receives about 1 million barrels of foreign crude a day for Gulf Coast refineries.

As Isaac continues to churn its way toward the coast, it’s likely to be a volatile week in the energy markets.